CPP at 70 | Watch this video before making your decision - Canada Pension Explained
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- เผยแพร่เมื่อ 5 ม.ค. 2024
- CPP at 70 | Watch this video before making your decision - Canada Pension Explained
𝗦𝗰𝗵𝗲𝗱𝘂𝗹𝗲 𝗮 𝗰𝗮𝗹𝗹 𝘄𝗶𝘁𝗵 𝗗𝗮𝘃𝗶𝗱 📅 𝗰𝗮𝗹𝗲𝗻𝗱𝗹𝘆.𝗰𝗼𝗺/𝗮𝗮𝗿𝗼𝗻𝘄𝗲𝗮𝗹𝘁𝗵𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁
🔍 Discover the surprising truths about the Canadian Pension Plan (CPP) and retirement planning in this must-watch video! Our in-depth analysis titled 'CPP at 70 | Watch this video before making your decision - Canada Pension Explained' is designed to provide Canadians with critical insights into the CPP and its impact on your retirement.
🌟 In this video, we unravel the complexities of CPP and explore why deferring CPP until age 70 might not be the best strategy for everyone. We dive deep into the financial implications, considering factors like personal health, life expectancy, and overall retirement goals.
💡 Key Highlights:
- Expert Analysis: Insights from a veteran advisor on retirement planning
- Real-Life Scenarios: Understand the impact of early vs. late CPP collection through various case studies.
- Financial Breakdown: Detailed examination of the financial benefits and drawbacks of delaying CPP.
📈 Maximizing Your Retirement Income: Our guide isn't just about CPP; it's a comprehensive look at how to optimize your retirement income. We discuss how integrating CPP with other retirement income sources can create a more robust and secure financial future.
👥 Who Should Watch:
- Canadians approaching retirement age.
- Financial advisors and planners.
- Anyone interested in understanding retirement planning and CPP.
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#CPP #RetirementPlanning #FinancialAdvice #CanadianPensionPlan #RetirementIncome #PersonalFinance #FinanceTips #Age70Retirement #Canada"
𝗪𝗵𝘆 𝗬𝗼𝘂 𝗦𝗵𝗼𝘂𝗹𝗱 𝗪𝗮𝘁𝗰𝗵:
This video is not just for economists or financial experts; it’s for anyone concerned about their financial well-being in the coming years. If you're looking for ways to safeguard your investments, plan for retirement, or understand the economic indicators that could impact your future, this video is your go-to resource.
By the end of this discussion, you’ll have a clearer understanding of the driving forces behind rising interest rates, market volatility, CPP / OAS, Retirement planning and the tools you'll need for protecting your assets and ensuring a secure financial future.
Don't leave your financial future to chance. Equip yourself with the knowledge you need and consider getting professional advice to navigate these uncertain times. Subscribe for more insights and actionable tips.
Disclaimer: This video is for informational purposes only and should not be considered as financial advice.
If you have any further questions about this video's topic or any financial planning questions in general, I encourage you to schedule your confidential meeting with me. You can schedule your meeting here: calendly.com/aaronwealthmanag...
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#CPP #retirementplanning
I think this is the most nuanced video on topic. Great job. As someone in their early 50s with health issues already, I can understand why someone might care about optimising a math equation.
really meant to say "might not care about optimising a math equation."
If you have room in your TFSA, take CPP @ 60 and put it into your TFSA and invest it in GIC's, you won't be disappointed.
I'm approaching 65 ... I definitely don't 'need' the money and may never. I was frugal and saved my entire life. However, I am also very educated in the realities of the climate crisis and what is likely to happen in the 10-25 year period. ... I understand CPP is presently healthy and well financed. ... I am more concerned about gov't function in the 15-25 year period. OAS is gov't revenue funded and is a BIG concern for the 10+ years from now period. I have great genes and try to stay healthy ... i'll be totally pissed off if I delay and the systems start to crumble!! (when I could have taken earlier)
I think another factor to weigh is the reliability of income that CPP provides. Deferring CPP and using RRSP money first means that income in the future is guranteed should the RRSP value fall. The counter argument is that dying early means that there is less money in the estate because the RRSP was depleted and CPP pays out relatively nothing on death. Depending on your objectives there is trade-off between security of income and legacy goals, and that trade-off changes with mortality.
This is an excellent summary of the timing impacts on the cumulative amount of CPP recieved. I agree completely that the overarching consideration is taking benefits when a person requires the funds. However, consideration of CPP timing is a starting point. There are, other factors that should be considered in the decision of when to start CPP. If a person has RRSP savings that must be withdrawn starting at age 71, delaying the CPP to age 70 may lead to a higher income level when combined with the RRSP and thus higher marginal tax level, which in turn may counter the desired total NET funds a person gets in their lifetime. A person may need to consider drawing down RRSP more in a bridge period before they take CPP in order to have a more tax efficient solution. There is also the consideration of OAS which can be taken while delaying CPP as a bridge. It also has a higher payment if delayed (although not as great as CPP).
Suffice to say that every person should consider their particular situation and evaluate all other sourcesof income and tax impacts BEFORE finalizing the CPP decison. As you rightly point out, once decided and paperwork submitted with the decision to start CPP it is set for life.
risk of differing to 70 and breaking even in early 80s and being significantly ahead by your mid to late 80s, is (a) you might not be alive (b) you might be alive but limited in what you can do and the money would have been better spent earlier in life to travel etc while you could still enjoy it! I like your sweet spot range of 65-67, perhaps living off some RRSP and cashing them out while you are in a lower tax bracket before CPP starts…
I liked the graph and the summary table, it really helps to put the numbers in perspective and see the impact of waiting. I'm one of the lucky ones with a pension (working for the Federal government). I plan to retire at 60 with 33 years of pensionable service which will give me 66% of the average of my best 5 years (2% x 33 years = 66%). Waiting to at least 65-67 (or after) is more likely the scenario I am looking for.
Brilliant, well done. It is our hope that my wife will take her CPP as late as possible to increase the indexed portion of her pension, she is self funded for retirement.
Thank you for this. Your table @8:37 really sums things up nicely. I'm currently in the purple column but know that if situations change I can always start at ~67/68 if needed. Tough to predict life expectancy though, my mother and her mother both lived until 93/94 but my father passed away early at 60. Really appreciate all your videos. Got to look into how RIFF sharing works. My personal situation differs from many of the scenarios presented by YT'ers since I'm 7 years older than spouse and plan on retiring at 65 (in 2 years).
I believe this is a much hotter topic than it needs to be. However, thanks for summarizing the options in a more realistic way than is usually discussed. It is really very simple. If you need CPP to put food in your mouth or a roof over your head then take it ASAP. For everyone else that does not "need" the money to survive then don't get caught up in this CPP game. Take the money as soon as you feel comfortable, invest it and forget about it. There are no awards given for the winners of the CPP game.
I really appreciate this video and I’m now reviewing my plan. I’m about to turn 60 and work in a skilled, unionized job that I like and my plan is to work until 70. I’m DEFINITELY putting OAS off until then but I may well start taking CPP at 67 or so and just put it in my RSP for those years.
This was just excellent! Thank you!
This is in fact, a great video, Aaron. I’m 65 in about a month and have decided to take CPP and OAS, even though I feel that the OAS will be clawed back in the first year.
Why take OAS if it'll be clawed back? Why not just wait a year or two and get higher OAS?
@@debbielockhart7762 I ended up changing my mind and now can wait until the math says I should start OAS and CPP. I was foolish 11 days ago:)
If you don't need the ca$h, then delay as long as you can - provided your health is OK in your early retirement years.
As a fitness coach I have to say that there's a huge difference between 'lifespan' and 'healthspan'. The latter is what you want to aim for and your lifestyle choices now will determine how far your healthspan stretches into your golden years. Genetics plays a small part as 'epigenetics science' is now confirming. All this determines when to take your CPP and as Aaron mentioned you take it 'when you need it'.
Great insight on staying healthy. Thanks for watching the video and for your comment
This is one of the best videos that is available. However there is on variable that you do not consider. My Cpp at 60 was $600, at 65 was $900, at 70 was $1500. I am taking my Cpp at 70. Since my only income is Oas I am eligible for GIS which is $1,000 per month which is tax free. From 65 to 70 I will collect $60,000 in tax free GIS. Both my parents lived until 88. Also I am single which is an important factor as family income is more for married couples which could claw back Oas due to a greater income. Also individuals who receive GIS receive supplementary provincial benefits quarterly. Naturally this will only for people that are debt free who are very good money managers.
Thank you for comment and for watching the video
Another great video. I won't need it at 60, but have been debating 65 vs 70 in my head for a long time. One factor I never see clearly factored in is the cost of using some RRSP funds to bridge the gap from 65 to 70. That cost would need to be factored in and would push the breakeven point beyond 82, wouldn't it? I guess that qualifies as "needing the money" and you advised to take it then. Thanks again for all your insight.
Happy New Year 2024 to you Aaron. Excellent, video as always. While others just pass on their opinions based on personal proclivities you present reasoned arguments based on facts. Appreciate the effort.
Thinking about taking cpp at 65 or bit latter want to melt down rrsp first
65 minimum. 😮
70 better 😊
Life Expectancy: Presented is at birth --> when you were born, you were expected to live to 84/81. More relevant is that given you are 65, and the universe hasn't killed you yet (for the H2G2 fans), your life expectancy has become 89/87. Understand, that 50% pass before these numbers and 50% pass after. Planners talk about 90 because 68% pass before 90 and 32% after (1 standard deviation)? btw. Anecdotally, my parents are 15 years older than when their parents passed, and 20 years ago I expected my father to pass 10 years ago. You can't outsmart Douglas Adams (again for the H2G2 fans).
Precisely correct ✅ 💯
If you reach 65 you’ve survived many things that kill people. 65 years of: Wars, pandemic, car accidents, young childhood illnesses.
Feel like my sweet spot would be similar. Is cola factored in as well. If you start earlier will cpp grow each year?
I have a bridge benefit in my Armed Forces pension that ceases when I turn 65. So is there any advantage to waiting to 70 or is it a “no brainer” to take it at 65?
What about if I take CPP at 60 and INVEST that money and get a 5% return on it (vs. waiting until 65 or 70 and getting NOTHING from CPP during those years). No one seems to put THAT type of calculations into their tables.
Thank you for all of your answers and videos . I have a question for you though. I have a maximum CPP benefit. My wife has a minimum not much. What would be the benefit for me to wait till 70 to increase my CPP of 42% but by the way, I am 64 soon to be 65 and then what happens if I die at 68/69 I’m not expecting do die and I’m healthy to this day . Would it be better to take CPP at 65 and invest my money instead and place it in a tsfa for example to increase our investments. I was mention for the survivor benefit she has a cap on CPP survivor benefit 60% she would receive from my CPP and she would not collect more so should I wait till 70 to take my CPP or should I consider taking my CPP pension at 65 and at least the money would be spent well or invested for my wife to increase her pension.
Has anyone done a study of which economic class benefits (most) from CPP?
Maybe because interest rates have been low on savings??? I don't commonly see INVESTING the amounts you take (before 70) instead of spending it ... and how that might mitigate the shortfalls in comparison?
Aaron Wealth - how come I never see any 'math' (or considerations) on INVESTING all CPP when you receive it (vs. spending) and smoothing out the difference(s). That's what I might do, as I'm not sure I'll see the benefit(s) of waiting (cross over at 82-83 and small differences for 5 years at least
Interesting observation. In the financial plans we do, access income is invested. It's quite common for clients to make TFSA contributions during retirement.
I retired at 63 using Rift RSP income. 65 with full CPP benefits. Should I start collecting CPP benefits on January 1st, 2025 or get them on December 31st, 2025. Thank you
Or if you retired at 55yr and are using part of a lumpsum and RRSPs to make it to age 65 for CCP but would be better use CPP at 60 and about half the amount of your RRSPs?
Depends how high of an RRSP balance you have. If it’s greater than $500K you may want to consider an RRSP meltdown and push off your CPP until 65-67. A financial plan will provide all the answers for you.
I retired August 1 this year 3 months before age 56. I have a DB Pension(paid into age 21 to 55 and with lots of overtime) and took the level income option with Pension dropping $1306/month at age 65. Good thing I didn't wait till 2024 because then it would drop that $1364 you mentioned.
So in my case taking CPP at 65 is more to maintain the same income as before age 65. By the time I get to 65 that CPP max amount will have gone up with inflation. I have 34 years max CPP and years(6) that add up to 2 years of max CPP.
How does being short 3 of 39 years affect the max CPP? Will it just be 36/39 x max CPP payment?
Excellent analytical CPP video. Terrific summary graphs. ✅
70 is still the CPP sweet spot. (Unless you’re unhealthy)
Statistically speaking (post covid) the average Canadian lifespan is actually increasing.
Statscan- if you’re 65 you can expect to live another 20.2 years.
The current life expectancy for Canada in 2024 is 83.11 years, a 0.18% increase from 2023. (MACROTRENDS)
Thanks for your comment and for watching the video. Here's an article with links to the data on Life expectancy: www.cbc.ca/news/health/life-expectancy-1.7042008
@@AaronWealthManagement
Thank you
The current life expectancy for Canada in 2024 is 83.11 years, a 0.18% increase from 2023. (Macrotrends)
My understanding from what I have read, is life expectancy in Canada is rising. This is the first I have heard of it falling the last few years. Do we know if this decline is COVID-specific, in which case it seems to me that this decline is an aberration?
Thanks for your comment and for watching the video. Here's an article with links to the data on Life expectancy: www.cbc.ca/news/health/life-expectancy-1.7042008
That is correct. The current life expectancy for Canada in 2024 is 83.11 years, a 0.18% increase from 2023. This trend will continue in future years at the same .18% rate. (MACROTRENDS)
Drinking, smoking, stressed early baby boomers
Covid is the culprit in the drop as it killed many Canadians before they’d reached the life expectancy they would have otherwise attained (and it was considerably worse in the US). Our number should improve in the coming years.
Mostly drug overdoses and other forms of suicide.
I’m sorry it’s nice to retire. I’m 69. I took it at 65. It’s not much money in Canada. I’m leaving with that money maybe won’t be enough. I’m going to the Philippines enough for me. I disagree my friend. Sorry I had to disability and it wouldn’t help me back to work, I was on fencing progressive conservative wouldn’t help me back to work pension disability I couldn’t get back to work. I want to start a business. I’m leaving and I got enough so I don’t give a damn
Using mortality rates from birth is not relevant, using mortality rates from if you are alive at 65 is so much more relavent, as the life expectancy of someone age 65 shoots up dramatically to late 80 s age
as well in a cole of 2 there is a 50% one of you will live to 90 plus. I beleive its 94.
Hi Jaret, thanks for your comment and for watching the video. The message here is examining your family history and then subtract or add years depending on how you've lived. Then consider the probabilities of you living longer, much longer than your own family average. That's one way of looking at it. Another way is simple realizing that 93% of people take CPP when they need the income and not based on longevity.
You'll need an updated show when Alberta leaves The CPP.
I am from Alberta, don’t you worry it will never happen ( that’s what we believe). Albertans are as much of Canadians as much they are conservatives.
What if I take CPP at age 60 and work continue to until 70
If you have zero confidence in our government as I do then you should take it early
Canada.....the government has screwed all of us who are 50+. I am no longer filing my income tax and will invest my money elsewhere. Throw me in jail, but how will we survive with about $873/mth with cost or living going through the roof. CPP is bs.
Actually the Canada pension plan is the best managed government retirement program in the world. We are very fortunate to have it. Most countries have nothing that comes close. And in many countries you get nothing. $0.
I would advise filing your income tax yearly sir, otherwise you’ll put yourself in the CRA’s Bombsights. No fun at all.
If you defer your CPP to age 70 the payout balloons 42%. Utilize your 60-70 period to meltdown your RRIF as CRA takes half of it upon death. 💀 🤓
Please watch the video again, CPP+OAS+GIS will take you much further than you think. You are golden if you have a little saved up in RRSP and TFSA. Best of luck and do not stress too much. Remember the goal is also to stay healthy to enjoy the golden years.
what is the investment impact attached to these charts if you are saving and not spending, the numbers could be much different